
(18)	Earnings Per Share

The Company follows the provisions of ASC Topic 260, “Earnings Per Share,” which requires companies with complex capital structures, such as having two (or more) classes of securities that participate in declared dividends to calculate earnings (loss) per share (“EPS”) utilizing the two-class method. As the holders of the Preferred Stock are entitled to receive dividends with common shares on an as-converted basis, the Preferred Stock has the right to participate in undistributed earnings and must therefore be considered under the two-class method.

The following table sets forth the computation of basic and diluted EPS:


	Successor									Predecessor
							Period from			Period from
							August 31, 2009			October 1, 2008
	Year Ended			Year Ended			through			through
	September 30,			September 30,			September 30,			August 30,
	2011			2010			2009			2009
Income (loss) attributable to common and participating preferred stockholders:
Income (loss) from continuing operations	$	14,962		$	(149,134	)	$	(71,193	)	$	1,100,743
(Loss) income from discontinued operations		—			(2,735	)		408			(86,802	)

Net income (loss)	$	14,962		$	(151,869	)	$	(70,785	)	$	1,013,941

Participating shares at end of period:
Common shares outstanding		139,346			139,197			129,600			52,738
Preferred shares (as-converted basis)		60,989			—			—			—

Total		200,335			139,197			129,600			52,738

Percentage of income (loss) allocated to:
Common shares		69.6	%		100	%		100	%		100	%
Preferred shares		30.4	%		—			—			—
Income (loss) attributable to common shares — basic:
Income (loss) from continuing operations	$	10,407		$	(149,134	)	$	(71,193	)	$	1,100,743
(Loss) income from discontinued operations		—			(2,735	)		408			(86,802	)

Net income (loss)	$	10,407		$	(151,869	)	$	(70,785	)	$	1,013,941

Dilutive adjustments to income (loss) attributable to common shares from assumed conversion of preferred shares, net of tax:
Income allocated to preferred shares in basic calculation	$	4,555		$	—		$	—		$	—
Reversal of preferred stock dividends and accretion		19,833			—			—			—
Reversal of income related to fair value of preferred stock conversion feature		(27,910	)		—			—			—

Net adjustment	$	(3,522	)	$	—		$	—		$	—

Income (loss) attributable to common shares — diluted:
Income (loss) from continuing operations	$	6,885		$	(149,134	)	$	(71,193	)	$	1,100,743
(Loss) income from discontinued operations		—			(2,735	)		408			(86,802	)

Net income (loss)	$	6,885		$	(151,869	)	$	(70,785	)	$	1,013,941

Weighted-average common shares outstanding — basic		139,233			132,399			129,600			51,306
Dilutive effect of preferred stock		19,064			—			—			—
Dilutive effect of stock options		87			—			—			—

Weighted-average shares outstanding — diluted		158,384			132,399			129,600			51,306

Basic income (loss) per common share attributable to controlling interest:
Continuing operations	$	0.07		$	(1.13	)	$	(0.55	)	$	21.45
Discontinued operations		—			(0.02	)		—			(1.69	)

Net income (loss)	$	0.07		$	(1.15	)	$	(0.55	)	$	19.76

Diluted income (loss) per common share attributable to controlling interest:
Continuing operations	$	0.04		$	(1.13	)	$	(0.55	)	$	21.45
Discontinued operations		—			(0.02	)		—			(1.69	)

Net income (loss)	$	0.04		$	(1.15	)	$	(0.55	)	$	19.76

The number of common shares outstanding used in calculating the weighted average thereof for the Successor reflects: (i) for periods prior to the June 16, 2010 date of the SB/RH Merger, the number of SBI common shares outstanding multiplied by the 1:1 Spectrum Brands share exchange ratio used in the SB/RH Merger and the 4.32 HGI share exchange ratio used in the Spectrum Brands Acquisition, (ii) for the period from June 16, 2010 to the January 7, 2011 date of the Spectrum Brands Acquisition, the number of HGI common shares outstanding plus the 119,910 HGI common shares subsequently issued in connection with the Spectrum Brands Acquisition and (iii) for the period subsequent to and including January 7, 2011, the actual number of HGI common shares outstanding.

The Predecessor common stock was cancelled as a result of SBI’s emergence from Chapter 11 of the Bankruptcy Code on August 28, 2009. The Successor’s common stock began trading on September 2, 2009. As such, the income (loss) per share information for the Predecessor cannot be retrospectively adjusted and is not meaningful to stockholders of HGI’s common shares, or to potential investors in such common shares.